It has been more than a year since the authorities in Ontario decided to open the gaming sector in the province to private operators, so it's time to have a look at this new and booming market and see how the online casinos and sportsbooks have adapted to the challenges.
Dozens of Operators and Brands
The market in Ontario opened on April 4, 2022, as the provincial government finally acknowledged that having a state monopoly in this industry was not beneficial. Plenty of people in Ontario had already been placing their wagers on offshore gaming sites, which were operating in a legal gray area.
After the market officially opened most private operators applied for licenses from iGaming Ontario, the local government agency that is in charge of the online gambling market in Canada's most populous province. At the end of the first quarter of 2023 iGaming Ontario reported that there were 46 different companies already licensed to operate in the province, with 71 different online gaming brands.
Among these operators we have seen big brands from Europe which tried to get in on the action, sports media brands which have tried to get into sports betting, and land-based casinos which aimed to grow their business online.
So far the brand leading the sports betting and online gambling market in Ontario seems to be Bet365, a big European brand, while in second place we find PokerStars and FanDuel, two big brands operated by Flutter Entertainment, a global giant in this industry.
North America's Largest Single Market by Revenue
During the first quarter of 2023, the province of Ontario saw over 14 billion Canadian dollars being wagered online by 920,000 customers of online casinos and sportsbooks. That led to gaming revenue of 545 million dollars, making Ontario the largest single market by revenue in North America.
Most of the operators that made the transition from the gray market to the regulated one did have the chance to hit the ground running as they already had solid databases of users and a loyal customer base. It was quite confusing for some of the users at first as they had to go through new KYC and AML procedures, but things got sorted out fairly quickly.
A particularity of the Ontario market is the popularity of online casinos, which have dominated the industry since the market opened in April 2022. In fact, during the first quarter of 2023, around 83 percent of the total handle registered by operators in Ontario came from iGaming, amounting to 11.6 billion dollars. In terms of revenue, 72 percent went to iGaming operators for a total of 392 million dollars.
Revenue hit new heights in each quarter since the market opened, with the 545 million reported at the end of the first quarter of 2023 representing a fifth consecutive quarterly record. We will most likely see a growing number of operators for a while but at some point the competition will most likely lead to some companies being driven off the market while others will consolidate their positions.
Source: “Ontario: The state of play“. iGaming Business. September 1, 2023.
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